Accel Raises India-Focused Venture Fund

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Accel has raised $450 million for its fifth India fund, a sizable jump over its $305 million fourth fund that was announced just last year. The raise comes at an uncertain time for Indian startups, which don’t have the same government-supported “moat” against U.S. competitors that Chinese startups have historically had.

As I noted Monday, Ola, the “Uber of India,” is raising funding at a valuation that’s potentially 40% lower than its last one. Data service Tracxn Technologies counts 800 “fading or dead” startups in India. And third quarter venture funding in the country was down by 70% over the same period last year, according to ValuePenguin.

Shekhar Kirani, a partner at Accel, explained that, similar to U.S. startup investing, India is experiencing a hangover from the “excessive enthusiasm” of 2015. After a record year of funding announcements, most of the global hedge funds pulled back on their investing in Indian startups in 2016.

But Kirani pointed to strong macro factors, particularly the mass adoption of mobile technology by consumers, enterprises and small and medium enterprises, and the business-friendly government. “Categories that used to take five years to scale, are now doing it in significantly less time – two to three years,” he said. E-commerce, movie tickets, cab bookings, groceries, food deliveries, local services and marketplaces are all going online faster than before. “We tend not to focus on how, when and where others are investing,” he said. Accel portfolio companies in India include Flipkart and Freshdesk.

This article originally appeared in Term Sheet, Fortune’s daily newsletter about deals and dealmakers. Sign up here.

Accel has raised $450 million for its fifth India fund, a sizable jump over its $305 million fourth fund that was announced just last year. The raise comes at an uncertain time for Indian startups, which don’t have the same government-supported “moat” against U.S. competitors that Chinese startups have historically had.

As I noted Monday, Ola, the “Uber of India,” is raising funding at a valuation that’s potentially 40% lower than its last one. Data service Tracxn Technologies counts 800 “fading or dead” startups in India. And third quarter venture funding in the country was down by 70% over the same period last year, according to ValuePenguin.

Shekhar Kirani, a partner at Accel, explained that, similar to U.S. startup investing, India is experiencing a hangover from the “excessive enthusiasm” of 2015. After a record year of funding announcements, most of the global hedge funds pulled back on their investing in Indian startups in 2016.

But Kirani pointed to strong macro factors, particularly the mass adoption of mobile technology by consumers, enterprises and small and medium enterprises, and the business-friendly government. “Categories that used to take five years to scale, are now doing it in significantly less time – two to three years,” he said. E-commerce, movie tickets, cab bookings, groceries, food deliveries, local services and marketplaces are all going online faster than before. “We tend not to focus on how, when and where others are investing,” he said. Accel portfolio companies in India include Flipkart and Freshdesk.